Cloud over CBD share cars

There is doubt over the viability of the share car service within the CBD since the City of Melbourne last year changed the rules and hit the three local operators with new fees.

While six on-street spaces have since been added inside the Hoddle Grid, one operator has not applied for any spaces and intends to boycott the municipality entirely unless the policy is radically relaxed.

Another operator says it only applied for the three on-street spaces it was offered to prevent them going to an expanding rival and would not be looking to do more within the CBD for the time being.

With a review of the policy expected later this year, the pressure will be on the council’s target of 2000 share car spaces within the municipality by 2021.

Green Share Car owner Paul Cummaudo says his company would not be applying in Melbourne under the current rules.

“We’ll probably never again apply to the City of Melbourne under the current policy,” Mr Cummaudo said. By contrast, he said, neighbouring municipalities had more enlightened policies.

Last year the council started charging operators thousands of dollars extra for on-street spaces and also stipulated that they needed to source an off-street space before being eligible for every extra on-street space.

The council is still charging $3000 for on-street spaces within the Hoddle Grid but introduced a $2000 fee for spaces within a wider-defined “CBD” including Southbank.

But all operators agree that the on-street fees are only part of the problem. What is worse, they say, is the cost of renting off-street spaces from private operators in order to quality for on-street allocations.

Mr Cummaudo said off-street spaces cost between $400 and $500 per month, which made his business unviable in the CBD. He said Green Share Car was also now charging an extra $10 booking fee in an attempt to recoup losses from its CBD share car spaces.

Mr Cummaudo said, rather than pay $2000 per year, his company had also moved five of its vehicles to the other side of the street in areas bordering the “CBD” where the charge was only $25 per annum.

He believes that, while the council may be satisfied that the numbers of share cars were increasing, its intervention in the market place could deliver an unsustainable long-term outcome because of a speculative attitude from his rivals.

“Out of the three companies, we’re the only one investing with real money,” he said.

Flexi Car general manager Greg Giraud said his company had reluctantly applied for three Hoddle Grid spaces and five wider “CBD” spaces since the introduction of the new policy, as a strategic territorial move.

He said the CBD was the “holy grail” of share car and the perceived risk of a competitor taking all offered inner-city spaces forced his hand. He said Flexi Car would not apply for any more in the foreseeable future.

He said the company’s Hoddle Grid spaces were being subsidised by other parts of the company’s operation, but it needed to claim territory for its longer-term viability.

Mr Giraud said the rule requiring companies to source off-street parking was the most inhibiting aspect of the council’s policy.

Both Mr Cummaudo and Mr Giraud acknowledged that their competitor GoGet had been aggressively expanding despite the new restrictions.

GoGet general manager, Justin Passaportis, said: “We are continuing to see growth and monitoring this constantly, but for us it’s too early to assess the impact of the new policy.”

“Car share is an essential transport option for residents and business in the city.”

A City of Melbourne spokesperson said: “Since council’s new car share policy was approved in July 2015, six new on-street spaces have been installed inside the Hoddle Grid precinct and 10 on-street spaces have been installed in the precinct inside the CBD but outside the Hoddle Grid.”

“An additional 15 on-street spaces have been installed outside the CBD,” the spokesperson said. “Council’s Urban Strategy Transport Branch will be reporting later this year on a one-year review of the car share policy.”